Posted
by
kdawson
on Friday December 10, 2010 @10:23AM
from the sleeping-under-the-world's-largest-bridge dept.

ChiefMonkeyGrinder writes "Yesterday the biggest software patent troll of all finally woke from its slumbers: Intellectual Ventures filed patent infringement complaints in the US District Court of Delaware against companies in the software security, DRAM and Flash memory, and field-programmable gate array industries. Intellectual Ventures was co-founded by Microsoft's former CTO Nathan Myhrvold, with others from Intel and a Seattle-based law firm." We discussed IV's potential for patent trollery last spring.

Good, I think. Hopefully this will finally cause big companies to fight to get rid of software patents and patent troll companies as a whole.

Actually, the response has not been to rid the world of software patents as you so hoped and the threat of Intellectual Ventures has long been affecting companies. From the article:

The threat posed by Intellectual Ventures helped prompt the rise of firms like RPX Corp. It is paid by companies to buy up potentially threatening patents; the companies receive licenses to those patents, and RPX pledges never to sue over them.

Think about that for a second. The system for software patents is so screwed up and backwards that it's cheaper to pay someone to buy up a patent and promise to never sue over it than it is for you to build a patent war chest and wait for the big one to hit. It's like patent insurance. Easily the most interesting thing in the article to me. Unfortunately this shows tolerance and a way to move forward.

Completely agree. Either a massive overhaul or throw out the entire patent system or at least the software part. It does no one any good except for lawyers.

At the very least, implement something like if a patent has not been actively developed into a product within two years, and/or if that product is not available to the public from five years of patent issue, then the patent becomes invalid and is automatically released into the public domain. This would keep patents to their true purpose - idea sharin

Well, it's not good directly, but if the big companies start getting hit by patent attacks, then we might soon see absurd patent laws and approvals get an overdue overhaul. Previously, they've seemed like an advantage to the big players because they form a barrier to entry that keeps out new competition. The big players have armouries of patents and, much like nuclear weapons are supposed to protect through a principle of MAD, they didn't use them on each other much. But it seems there is rampant proliferation and we're seeing patent fights between big players erupt despite this (e.g. Nokia and Apple). So maybe disillusionment with them will creep in. And unlike nuclear weapons, disarmament is simple - big companies can't advocate for a change in the laws of Physics, but changes in the laws of the land, they can do.

Maybe it's optimistic. Maybe it will all settle down into a cartel and the patent threat to small players will remain. But if the patent trolls are greedy enough to really take a bite out of the hand that feeds them, perhaps not.

To put in the perspective of world politics, the big companies are like Russia, China, or the US. Each has significant assets to protect, making MAD a viable way to protect themselves.

The patent trolls are like North Korea or Iran; they have no real assets to protect and nothing of significant value that can be destroyed (assuming you don't give a damn about people or jobs, which they don't).

So as long as the big companies have something to protect, the North Koreas and Irans of the business world will continue to harass them until the rules change.

You miss the point that I was making. Microsoft or Motorola can't recommend that the laws of Physics be changed to make Nuclear weapons ineffective (well, they could, but only for the lulz). However, they can quite plausibly bring about patent reform by pushing for changes in the laws of, well, law.;)

A few super-powers having nuclear weapons gives them a game advantage over the non-nuclear powers. But when that strategy fails, it is better for them to have everyone disarmed and fall back on their mighty

Follow-up to my previous reply: I think I slightly mis-read you when you expanded on and improved my analogy. I guess on Slashdot I'm just used to posts following the pattern or Statement - > Disagreement.;)
Sorry.
H.

The trouble is any overhaul of the system prompted by big business is going to largely help big business only.

There is a chance our lawmakers could be reasonable, and evaluate things with both big business and the general public's interests in mind, but lets face it, they don't exactly have a history of being calm, rational, and reasonable.

Take the current tax cut extension debate: The (liberal) democrats want to screw the rich, even if they have to screw the poor and middle class to do it. The Republican

Here, I'll show you. You go build me a car factory, and in return, I'll give you a shiny number of your very own. Then you give some of your number back to me and in return I'll give you a car from my factory.

But then you can give some of noidentity's number to another person who will give you food and clothing for your children, for example. So you didn't give your car in return for nothing, there's merely a time delay before you get something solid in return for it.

Your argument boils down to eliminating arbitrary currency on the basis of it having no intrinsic value. Would you propose we return to a barter system? The only reason currency works is because it has use as a universal exchange medium between arbitrary sets of goods; bartering requires both parties have something the other party wants.

Faith in the buying power of currency is what gives it value, because without it, the exchange of goods would be so unnecessarily difficult as to significantly hinder the

I think that's a good argument to get people to stop calling it "imaginary property". Things like currency and many forms of contract (retainers, rental agreements, etc.) fit under an intuitive definition of "imaginary property" and not under one of "intellectual property".

Twisting words like that to inject your opinions has always struck me as juvenile. I don't mean to pick on anybody here in particular -- slashdot has its jargon. But imagining this term at the outset makes me think of a grown man heckl

We have intellectual property because we decided a long time ago that ideas have value. If they have value, should it not be possible to buy, sell, or trade them? And if they can be bought, sold, or traded, are ideas then not a form of property that can be owned?

It is certainly very different than ordinary property, and so special rules must apply, but it is most certainly real.

People get confused by these things often, but the fact that it does not have an physical form that you

Yes, ideas like physical things have value. Unlike physical things, they're not limited in the number of users. If I have a grape, I can eat it. If you take it from me and eat it, I can't eat it anymore, and must find something else to eat. If I have the idea of how to double my grape harvest, your using that idea as well doesn't diminish my grape harvest. This is the fundamental difference, and why it's imaginary property. To treat it like real property is insane, because it means I now have control over e

It's not the idea that is traded or sold, it is the reward for having or developing the idea. If you suppose that someone should be rewarded for coming up with an original and innovative design or idea that moves the species forwards, then it's arbitrary and incredibly limiting to say that the reward can't be represented as money.

Most of capitalism is not about imaginary property. And if you had a large company that scaled up by employing hundreds or thousands of people only to have (cough) Chinese companies come in an steal your special sauce, you'd suddenly find imaginary property is your hundreds or thousands of employees being laid off. Them are imaginary property.

Here, I'll show you. You go build me a car factory, and in return, I'll give you a shiny number of your very own. Then you give some of your number back to me and in return I'll give you a car from my factory.

Well, who is to blame, the car factory guy, or the guy who voluntarily built it, knowing this is what he would get in exchange (not that this is really all he gets in reality, but I'll play allong with your hypothetical)?

Corporate leeches like this are why American capitalism is in the toilet.

Well, this is American capitalism at its finest, and it's the logical conclusion of the way they do things. The whole ACTA treaty is so that patent-trolls and IP lawyers can sue every last motherfucker on the planet.

The American notion of capitalism is the most bloated, fucked up, and protectionist thing you can imagine. For a country that constantly says how much they want the free market and free trade, they do everything they poss

My biggest gripe about patents is that they're kind of like legal blackmail. "Pay me money or I'll ruin your company in a large number of frivolous lawsuits." Patents were originally intended to protect inventors, but companies like IV have provided an evil twist.

Why would they bother buying any patent off the inventor when they can just spin off 10 or so trivial patents on any of the even slight variations of the concept?

They then rip off the concept and sell their own liscences and if the real inventor objects they can just threaten to use their own 10 patents against his 1 and tie him up in court until his cute little startup bites the dust.

then they buy the patent for a song when his startup fails and is liquidated.

Patents were originally intended to protect inventors, but companies like IV have provided an evil twist.

The evil twist being that they buy patents from inventors willing to sell their patents to them?

No, the evil twist being that they sit on the patents, not using them, hoping that if someone concurrently develops something similar, they can use any patents of a similar nature to beat the ever-living fuck out of the new guy in court for patent infringement unless he pays them a hefty fee. Thus patents are punishing inventors.

I thought the justification for continuing tax breaks for the wealthiest Americans was that it would help the economy, because investment would trickle down through innovation / job creation. Here is a wonderful counter point to that argument.

If we want to entice the wealthy to use money to create jobs, why don't tie their rewards directly to job creation? These people are actually killing the economy and making people poor by creating a money-sink in the economy where no value is added. They are not onl

These people are actually killing the economy and making people poor by creating a money-sink in the economy where no value is added. They are not only hurting these big companies with their greed, they are helping to force a divide in wealth distribution and indirectly making real people go hungry.

Your logic is impecable; however, it will bounch straight off of market fundamentalists. The economy of imaginary things is precisely what the new world order stands for, and an expression of the correctness of laisezz-faire capitalism. Railing against it is totalitarian, and will just interfer with wealth creation and freedom. Interesting that wealth is created out of imaginary things that are meaningless, trivial, and detrimental to getting real work done. But, in the words of one venture capitalist: IP is the new gold. The economy has to grow somehow -- and that is the ultimate rationalisation for this madness.

His logic isn't impecable (sic) nor impeccable. His unfounded assumption is that the wealthy are not using money to create jobs. Very few of the wealthy are patent trolls as the gp seems to think. He's arguing that the few examples he thinks he sees allow him to damn a whole class.

Many of the wealthy got there by investing in companies that produce jobs. Some greedy have destroyed jobs, but one doesn't need to be wealthy to be greedy as legions of Business School Product will attest.

No, many of the wealthy got there by knowing how to game the system, or by inheriting their wealth. Why do you think so many freighters and other resources are registered out of the Bahamas, or Indonesia, or place like that, when their owner is the whitest mofo ever, and with no vested interest in the point of registration? Because it's orders of magnitude cheaper. Same with bank accounts and housing. The reason the rich stay rich is they can afford to spend *some* money up front to find the cheapest way to

I thought the justification for continuing tax breaks for the wealthiest Americans was that it would help the economy, because investment would trickle down through innovation / job creation.

"Trickle down economics" is rank bullshit. Wealth doesn't trickle down, it flows up. Wealth is created on the factory floor, the programmer's cube, the fry cook's stove. The wealthy do not create wealth, they control wealth.

Giving a rich man money doesn't give him any incentive to put it into the economy at all, let alone create jobs. If business is bad and he can't sell many of his wares, no tax break will induce him to hire. The only way he's going to hire is if demand for his product outstrips his capacity to supply it.

If you want to stimulate job creation, you give tax breaks to the middle clas and poor. Especially the poor, who have to spend that money out of necessity. They spend that extra money on goods that the rich man's employees creates, and if they buy enough, the rich man will have to hire to meet the demand.

Don't give a tax break to the rich for hiring the poor, give it to the poor themselves.

The article states that Intel is one of the investors of Intellectual Ventures. The article also says that one of the lawsuits was filed against McAfee, which Intel recently bought. So in this case, Intel is hiring someone else to sue itself - it would be much easier to hold an employee venting day if that's all they wanted to do.

I work part-time at Intellectual Ventures Labs, which enables me to get out of the house and exercise the nerdy predilections that I used to exercise at Blue Origin. This is a sort of all-purpose science lab and thing-making facility where new inventions are developed.

Maybe they actually do research there? From the Wikipedia page, they've done work on a nuke reactor that can burn uranium waste or thorium, the mosquito laser, and modeling of Malaria spread via mosquitoes, among other things.

From the Wikipedia page, they've done work on a nuke reactor that can burn uranium waste or thorium,

It's unclear how original their research is, though. From the brief article I read on them a few years ago, they had patented several inventions related to Thorium power without actually developing any prototypes. Meanwhile, there were actual companies in Russia developing real Thorium reactors. It's got to be awfully depressing to pour millions into developing a working prototype only to find that some

I work part-time at Intellectual Ventures Labs, which enables me to get out of the house and exercise the nerdy predilections that I used to exercise at Blue Origin. This is a sort of all-purpose science lab and thing-making facility where new inventions are developed and then locked away for 20 years.

They don't do any good anymore. Little inventors cannot even hope to sue a company like Intellectual Ventures unless they can find a lawyer willing--and able--to last years of litigation against the kind of legal resources such a company can focus on them. God help the poor SoB if IV retaliates by claiming infringement on half a dozen of its patents in the process of creating your own patent.

The reason people still support them is "fairness." It's not "fair" that people have great ideas but someone else mon

While I think that patents can sometimes be a good thing, (e.g. pharmaceuticals where new drug development is extremely risky), the current patent system is so bogged down scrapping patents entirely may be better than what we have now: a gradual continual strangling of tech innovation. The cost and legal risks of tech innovation in America keeps on going up.

There will be no sanity from the Patent Office while they directly benefit from patent renewal fees, fees that are the bulk of the PTO revenues. Th

Below are links to background info, but keep in mind that trolls create a tax, but they're not the big problem. They're generally not the patent holders that break standards or exclude free software projects. They're just after money, so they are parasites to the rich. The MPEG-LA patents, for example, are much more harmful (they blocked HTML5 from including a standard video format) and are held by "real" software companies.

If any entities deserve some punitive taxation, these people and their lawyers should be it. They produce nothing and simply suck capital from the producers. How about a 90% tax rate on lawyer fees from lawsuits. Let's see how long the lawyers stick around. Oh wait - lawyers write the tax code, shit.

Well, we need more than that, but starting with an anti-troll law would be a great start. Such law might go something like this:

The Jeff Foxworthy "You might be a Patent Troll"

1. If you own a patent and have no intention of actually making something with it,...2. If you have a bunch of patents and are trying to extract a bunch of money from a bunch of companies,...3. If you...?

There probably isn't but there should be. That's really how these trolls get their abilities.

I think I would like to see some sort of compulsory licensing scheme to avoid patent litigation in which after X many years, any patent holder would have to license their patent out for some standard fee that would change depending on if they produced anything the patent covered or not.

Even if there is, do you go to the patent office every time you do something obvious just to check whether the idiots granted a patent on it without having a clue just that they just patented the equivalent of the wheel?

Will IV allow licensing of their patent portfolio, or will they do like a lot of companies, just get patents so nobody else can use them?

Well, the original Slashdot article linked in TFS indicates that "it doesn't actually use these patents – except to threaten people with. In other words, Intellectual Ventures is a patent troll". They only license their patent portfolio. Expect this to basically be a shakedown.

Man, I hate that a company can exist just to own patents and sue people.

The normal practice in these sorts of things is to "sell" the asset off into a shell company which racks up the lawyer debt, if they win they pay some insane percentage to the parent company as residuals, if they lose there are no assets to come back on for the counter party lawyers fees or any countersuit.

Oh, how I wish that was all that they did. As you can see from their site [intellectualventures.com]:

Intellectual Ventures has been actively inventing since August 2003. The company has filed thousands of patent applications in more than 50 technology areas and has thousands of ideas under consideration.

Since 2003 they have been gumming up the USPTO as well. Note that they've filed thousands of patent applications. No mention of how many were issued. It's entirely possible that they were issued to the actual people working at IV and not to IV but a search shows nine patents issued to IV [uspto.gov] on the USPTO.

So they are a double troll. They don't actually make anything, that would leave them open to patent trolls. Instead, they come up with *new* ideas and wrap patents around them only to use them as sueballs.

Since 2003 they have been gumming up the USPTO as well. Note that they've filed thousands of patent applications.

And it has paid application fees, search fees, and examination fees on every one of them. The Patent Office is entirely supported by fees. IV isn't "gumming up the Patent Office." In a sense that's not even possible. As long as a decent number of the applications issue as patents and IV pays maintenance fees on them, then they're fully paying their own way.

I have no problem with what IBM does. They are a practicing entity which is directly opposite of what IV does [wikipedia.org]. The difference is that a high rate of IBM's patents are granted. This is proper use of the patent system because IBM then makes those products.

I suspect Intellectual Ventures spends a nice chunk of it's money on forcing patents through the system. Thousands of patents that evidently have little business being patents. But their legion of lawyers persists pushing these patents and revisioning them. Yes, they pay thousands of dollars on each patent to do this but this is an abuse of the patent system if they do this just because they have money.

Imagine if this first salvo results in hundreds of millions of dollars going to IV. Then what? Then that money goes into putting more strain on the USPTO and more lawyers are hired to push unwarranted patents through the system. Then those win more suits and more lawyers are hired in a classic breeder model of lawyer propagation. If my calculations are correct, by the year 2054 the Earth will be a mass of patent lawyers expanding outward at the speed of light only to eventually collapse back in on itself causing a "Big Crunch" and ending the universe until the next big bang. Intellectual Ventures must be stopped (with apologies to Stanislaw Lem).

But seriously, the two are totally different in that one produces and one sues.

What evidence do you have that IV's patents are also not granted at a high rate? It takes years for a typical application to go through the examination process even without any appeals. It's not surprising that IV has only had a few patents granted so far. IBM's 4000+ patents granted in 2008 were mostly filed years ago.

This is proper use of the patent system because IBM then makes those products.

Oh Anonymous Coward, not all of life's problems can be solved with a DDOS. Like when my girlfriend left me last week and blocked my phone number -- calling her until her voice mail was full from work and friend's phones did no good.

You aren't DDOSing enough - you need to branch out from just phones, and try and contact her in a variety of ways. It's like you're only trying to connect on one port. You need to be spamming her inbox, visitting her at work, at home, when she's out at dinner, you need to be leaving love letters EVERYWHERE she might go, you need to be outside her window blaring music from a boombox...

Unfortunately people have been doing this ceaselessly for the last decade+. The only thing that has accomplished is cause the USPTO to get significantly sloppier in their work. The result of which is simply an ever growing body of patents with overly broad terms, little regard for prior art, etc. In short, it has only made the trolls stronger and more abundant.

With respect to goods/service producing companies, patents are no longer about protecting R&D investments. Rather it's about ensuring a defense using the M.A.D. doctrine is in place to safeguard their future ability to conduct business. Unfortunately, M.A.D. cannot be established against a patent holding corporation such as I.V. since no one has yet figured out how to patent aspects of the patenting process. These trolls, and I would assert patents in general, are one of the biggest hindrances to the U.S. economy. This is putting us at a significant competitive disadvantage to the rest of the world and it's only going to get worse.

Man, I hate that a company can exist just to own patents and sue people.

You do realize that category includes a large number of universities and colleges, right? And publicly funded research labs?

What about companies that received a patent but decided not to pursue the technology themselves? Do they just have to eat the cost of the R&D? Or investors in a company that went bankrupt? They can't recoup any of their investment through the sale of the patent portfolio? Those scenarios are two major sour

Again the difference is in the production. Universities, colleges and research labs still produce things. IV does not. They file patents based on "ideas' (as opposed to something they've developed - which makes me wonder if every patent they file shouldn't violate the whole "you can't patent obvious things" rule) and sit on patents they've purchased. No original research and development goes on there - they are lawyers, not creators.

As for your questions - yes, companies that develop something and choos

Man, I hate that a company can exist just to own patents and sue people.

Under the current patent system, this company type is likely to be the most profitable. By not actually utilising any patents, they are free from any claims of patent infringement. This means that all of those companies which have built up huge patent war chests with the aim of a "mutually assured destruction" if they are ever sued suddenly become vulnerable. There is no "patent war" defense against a company that doesn't make anything. If you don't make anything, you can't be countersued. From a business perspective it's an awesome idea. If Nokia were to set up an independent legal entity and assign ownership of their patents to that entity, that legal entity could then sue Apple without any fear of being countersued. Apple could do the same. I'm surprised we haven't seen any large companies doing this earlier, but if IV is successful, I bet we'll see a lot more of this company type in the future.

Let's say you're an inventor. You're great at understanding mechanical problems from angles other haven't thought of. But you don't know anything about finance, managing suppliers, running a factory, marketing or selling. So what you do is you license your patents to people who do know those things. Because you do have common sense you form a corporation to handle the licensing in order to limit your liabilities.

Will IV allow licensing of their patent portfolio, or will they do like a lot of companies, just get patents so nobody else can use them?

Well, from their their website [intellectualventures.com] they list all their "products" and services:

Purchasing a nonexclusive license to relevant IV portfolio(s) on a term or life-of-patent basis

Purchasing an exclusive license (subject to pre-existing licenses) to selected IV invention(s) on a term or life-of-patent basis

AccessingIntellectual Property to use as defense against the threat of corporate assertions

Leveraging IV’s sophisticated acquisition capabilities to gain access to inventions of particular interest to you

Using IV as a financing source for mergers & acquisitions (M&A) whereby IV agrees to purchase a target company’sIntellectual Property to “bridge” the acquirer’s effective offer

Creating new inventions in conjunction with IV’s inventors and invention process

The first bullet appears to answer your question that yes, they do. But when you say "patent portfolio" I don't think you'll find anyone with enough cash to access to the whole portfolio, most likely it's one license to one patent at a time. I think their big "product" is providing a service to liquidate your patent very easily (like a pawn shop for patents) so far. This salvo may change that.

I'm not sure. I just read SuperFreakonomics and IV is featured (quite positively, I might add) in the book.

According to the authors, IV exists to provide a mass market for IP by acting as a clearinghouse. They purchase patents (from anyone, but that does include small-time engineers/inventors without the capital to develop their creation) and solicit other companies to license them. They also do a fair bit of inventing themselves (including some awesome environmental engineering devices intended to stop g

You make two mistakes in asking what/. thinks are the correct answers. One is assuming that Slashdot has a group mind, the second is that the most vocal are the most representative. But with those caveats:

Sure, you could sell your patent if that's the best way of capitalising on it. But whether that's good or bad depends on other factors - mainly the validity of your patent. If you just patented an idea that would likely occur to other people and sat on it until someone else did think of it and then sued over it... That would be bad. You've contributed nothing and caused a destructive effect. If you were an independent research chemist who came up with an innovative new process after much testing and it's far from obvious, then by all means approach another company and sell or licence your patent. But you see the difference between the two examples is not whether or not the patent has been sold. It's whether the patent has been originally awarded to someone or some group that actually added to society with their original contribution. What companies like this do, is file as many stupid obvious or natural ideas as they can and then look for someone else to independently stumble into the same area before pouncing.

The answer to the question of whether you have the right to sell the patent, is actually more, do you have the right to a patent. I.e. did you come up with something genuinely original, either through your unique genius or more likely careful testing and research, that has added to society's capability, or did you write down "a website could have a 'one-click' button that lets you buy things" and wait for someone to implement it.

But whether that's good or bad depends on other factors - mainly the validity of your patent. If you just patented an idea that would likely occur to other people and sat on it until someone else did think of it and then sued over it... That would be bad. You've contributed nothing and caused a destructive effect. [...]

The answer to the question of whether you have the right to sell the patent, is actually more, do you have the right to a patent. I.e. did you come up with something genuinely original, eithe

If I am unable to raise enough capital to launch my invention properly into a marketplace, is it socially acceptable to sell it to an entity such as IV?

"Socially" depends on the society. If you hang out on Slashdot, it's socially acceptable to rip off people's work and investments because "copying isn't theft", doesn't mean there isn't real world harm. You have to follow your own conscience and reasoning. But yes, if you've legitimately contributed something original and non-obvious to the World but lack the capital, means or time to develop it yourself, sure, it's not wrong to sell that on and say: "this is worth a hundred-thousand dollars, but would tak

Let's say you have a patent. Advertise it fool. You HAVE the patent, what are you scared of? Otherwise I doubt you actually have a patent, or suppose it to be weak & possibly invalid.

The correct thing to do is shop it around to companies that could actually use the patent as more than just legal leverage. The wost thing you can do is to sell it to a Troll that will only use the patent as a legal vice to wring money from useful businesses. This is how a troll can get you, you think they will shop th